Snapchat Spends Black Friday Serving HBO Ads to Every User on its Service

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Snapchat users emerging from their tryptophan haze this morning will see a promoted story from HBO with a message telling Black Friday shoppers to stay home and watch "Game of Thrones" instead. The ad is the first since Snapchat began serving ads to go out to every user in the country.

The ad can be found in the "stories" section of the app where publishing and media partners host channels and shows. HBO's channel will also be labeled as an ad, it will have a tile with a cover image pointing to the promoted story, and people click the tile to watch it.

Until now, advertisers could only buy short, interruptive video ads inside stories that are created by publishers like BuzzFeed, Hearst, 21st Century Fox, NBCUniversal, and other media partners. Advertisers typically use Snapchat's automated platform to buy the ads inside the stories section, which allows them to target users based on age, location, gender, interests and other characteristics.

HBO series Insecure
HBO series Insecure Credit: Snapchat

The new "Promoted Story" is meant to reach everyone in a given country. "Sponsored Lenses" can be made available to everyone in the app, but those are a less traditional ad offering, which users discover in their cameras while taking videos. Lenses are animated filters for decorating selfies.

Promoted stories are a mobile video ad that Snapchat says gives brands a way to tell stories like any other media partner on the app, only they are labeled as an ad.

Snapchat compared the new unit to the YouTube masthead position on its homepage, which is seen by all visitors. Twitter has a similar platform-wide format, as well, with a video that appears at the top of everyone's feed over the course of a day.

Snapchat's first ever ad format was similarly served to everyone in the app. In 2014, Snapchat sold its first "brand stories" for the movie "Ouija" that appeared in people's message feeds, where friends' messages arrive. That format was short-lived and stopped selling in less than a year, however, and Snapchat has since embraced a more targeted, customized approach to advertising.

Snapchat would not say how much a "Promoted Story" costs. It will be served to the 88 million Snapchat users who visit the app every day.

Snapchat is still trying to crack the right advertising formula that gives brands the tools they need to create ads, target messages, and buy the ad space efficiently. Meanwhile, it has a sensitive fanbase it wants to keep from feeling overrun by commercial messages.

So far, the company has fallen short of advertising goals in its first year as a public company, generating less revenue than investors had anticipated. In the third quarter, $208 million in sales was $30 million less than forecast, according to analyst estimates.

Last quarter, Snapchat ad prices dropped 60 percent because most of the ads are now sold through automated auctions that depressed the value.

Snapchat CEO Evan Spiegel has promised a redesign of the app to create a more lucrative environment for advertisers and media partners. Snapchat is expected to tweak how it presents stories and shows, and will rely on machine learning to better connect users with content they will watch.

It's important to note that while the story ad will appear for everyone on Friday, a person has to choose to watch the story. "While they say they reach everyone, everyone is not watching them," says an advertiser, who is close with Snapchat but would only comment on condition of anonymity.

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